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Artificial Intelligence Stocks Propel Wall Street's Record High Close

Artificial Intelligence Stocks Propel Wall Street's Record High Close

Nvidia's Strides Capturing Wall Street’s Attention

On Friday, both the S&P 500 and the Dow Jones Industrial Average held their own, closing at an unprecedented high. This uptick was fueled in large part by artificial intelligence (AI) stocks, which continue to power Wall Street's triumphant rally. Investors keenly watched as Nvidia (NASDAQ:NVDA), a bellwether for AI stocks, once again made headway, momentarily breaching a $2 trillion market valuation—a first in the company's history.

Following a stand-out earnings report, the AI chip manufacturer, Nvidia, saw an increase of $277 billion in its stock market value on Thursday—marking Wall Street's single largest day of gains. Although smaller gains were recorded on the week's last trading day, Nvidia's performance continued to hold the spotlight.

A Critical Role for Nvidia

"Nvidia stands as a crucial factor, if not the principal one, in pushing both the Nasdaq and the S&P 500 further up," observed Anthony Saglimbene, Ameriprise's chief market strategist.

Saglimbene commented on how market players have been adjusting their Federal Reserve interest rate cut predictions, a development that could otherwise potentially stall the markets. However, the robust performance of Nvidia and its Big Tech counterparts have caused such concerns to fade into insignificance.

"The current focus on Big Tech—and Nvidia in particular—is so pronounced that these anxieties are being overlooked," he remarked.

Ahead of the curve, Nvidia has been leading the charge, pulling up other Big Tech and high-growth stocks in past sessions due to investors buying into the AI trend. However, on Friday, some of these stocks, including Apple (NASDAQ:AAPL), Tesla (NASDAQ:TSLA), and Meta Platforms (NASDAQ:META), experienced a slight drop.

The Broader Market

Shares of Super Micro Computer (NASDAQ:SMCI), another player that profited from the AI surge, dipped after pricing its convertible notes.

As per preliminary figures, the S&P 500 rose by 2.28 points or 0.04% to close at 5,088.78 points, while the Nasdaq Composite fell 44.80 points or 0.28% to 15,996.82. The Dow Jones Industrial Average climbed 60.58 points or 0.16%, ending at 39,129.69.

Most of the sectors in the S&P ended the day on positive notes. Utilities—which were the only sector in the red the day prior—as well as materials and industrials led the pack. In notable considerations, Carvana soared after posting its first annual profit, facilitated by a bond agreement resulting in $1 billion debt reduction.

Conversely, Warner Bros Discovery (NASDAQ:WBD) suffered a setback, reporting a loss for the quarter that surpassed expectations as it grapples with the impact of two major Hollywood strikes on content production. On a brighter note, the payment firm, Block—led by Jack Dorsey—experienced a boost following a prediction of better-than-expected earnings for the upcoming quarter, banking on resilient consumer activity.

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